What Washington has in common with Sears, Montgomery Ward, Woolworth, and GM

By Mencken’s Ghost

In the mid-1970s, Sears built the
110-story Sears Tower in Chicago’s
Loop and filled many of the floors with its bloated
corporate staff instead of spending the money on upgrading its stores,
merchandise, and store personnel. Soon after, Sears began to lose touch with
the marketplace and is now a dying company.

North of the Loop was the fancy
headquarters building of Montgomery Ward, which is now in the ashbin of history
due to its stores looking like ashbins while its central staff grew in size,
pay, power, and separation from the marketplace.

The Woolworth
building still stands in Manhattan
as an ornate architectural masterpiece, but the Woolworth Company is in the
ashbin with Montgomery Ward.

At the same time that Sears was building
its monument to bloat, bureaucracy, overhead and centralization in the 1970s,
General Motors was receiving acclaim in the business press for its General
Motors College, where GM managers were taught to think and act alike--like
bumbling bureaucrats, bean counters, and producers of thick policy manuals
instead of quality cars. The
college did not teach the new manufacturing techniques of quality guru W.
Edwards Deming, who had to go to Japan to find a receptive audience.

This story
has been repeated so many times throughout history that it seems to be an
immutable law of nature. Time after
time, successful organizations end up dying after centralizing authority in
large headquarters and becoming top-heavy with apparatchiks.

I’ve studied this phenomenon for 40
years, published a business book on the subject, consulted with numerous
organizations of all sizes on the superhuman effort it takes to reverse course,
and stood before thousands of skeptical and angry managers and employees to
explain why survival depended on doing things differently. The most resistance was always from those who were
the least capable of doing the real work of the organization.

The same
immutable law applies to nation states, including, sadly, the United States,
which was established on the organizational principle of a small federal
government and semi-autonomous states. Ever since the nation’s founding,
power, money and apparatchiks have gravitated to the country’s headquarters in Washington, D.C.,
not only to the federal government itself but also to the private-sector firms
that feed off the federal government.

Washington, D.C., and the
surrounding suburbs are like the former headquarters of Sears, Montgomery Ward,
Woolworths, and GM: bloated, bureaucratic, out of touch, unskilled at real
work, and living on the diminishing wealth produced in the hinterlands.

Consider:

The population of metro Washington, D.C.,
has increased 86% from 1970 to today. During the same period, the rest of
the nation has grown 52%. Metro
Washington
is now the richest metro area in the nation, with an average household
income of $84,523, versus a national average of $50,046. One
of the reasons for this high income is that the average compensation
(including benefits) of the more than 170,000 federal employees who reside
there is approximately $126,000.The metro area also has nearly 13,000 registered
lobbyists, is home to defense contractors Lockheed Martin Corp. and
General Dynamics Corp., and leads the nation in the number of lawyers per
capita, with one for every 12 residents.These factors have helped to maintain a
relatively low unemployment rate of 6.1% in the metro area, in spite of
the high unemployment of poor blacks in the inner city of D.C.

What do all of these people do? Most
issue diktats. The diktats are
summarized in the Federal Register, which will have more than 80,000 pages this
year, or four times as many pages as it had in 1970.

Many of the diktats pertain to education,
which, since the U.S. Department of Education
was established in 1979, has become more regulated, centralized and uniform
across the land. Just like students at the General Motors
College, students in K-12
schools and universities are taught to think alike, but about government
instead of car making.

Unfortunately, the law profession is the
dominant profession in Congress, the Executive Branch and, of course, the
Supreme Court. This is unfortunate
because lawyers are the absolute worst in managing people and
organizations--even worse than college professors--due to learning to work as
isolated individuals in law school and law firms instead of as interdependent
members of teams trying to achieve common goals. They
will be the most resistant to shrinking the nation’s headquarters and returning
authority to the states and the people.

But there is still hope. After all, the Sears Tower still exists,
albeit under a different name after being sold to an investment group. Maybe
we can sell Washington
to the Chinese.

_________________

Mencken’s Ghost is the nom de plume of an
Arizona
writer who can be reached at ccan2@aol.com.